The higher courts have had a busy time recently dealing with claims under the Inheritance (Provision for Family and Dependants) Act 1975. First, Ilott v Blue Cross made it to the Supreme Court, and then, in December 2017 Warner v Lewis was heard in the Court of Appeal. The judgment opens with the sentence “This is the first time that an application by an unmarried partner under the amended subsections 1(1)(ba) and 1(1)(A) of the [Inheritance Act] has reached this Court.’
The reason that Warner v Lewis came to be considered by the Court was because of an argument over the meaning of ‘maintenance’ in the Act – whether the lower courts were right to order the transfer of a property from a deceased’s estate to a cohabitant for full (or possibly more than full) value.
Mr Warner had been cohabiting with the deceased, Mrs Audrey Blackwell, for 19 years before her death on 6 May 2014. The evidence was that both parties had anticipated that he would predecease her, and he openly admitted that he was the wealthier of the parties. As a result, Mr Warner had made a will leaving a substantial amount to Mrs Blackwell but she had not done the same. Sadly, Mrs Blackwell died first, and Mr Warner faced losing his home. By the time of the hearings, Mr Warner was in his 90s.
Mrs Blackwell left her estate to her daughter, Mrs Lewis, who made it clear from before her mother’s death that she expected Mr Warner to leave the house – she asked him to sign a declaration prior to her mother’s death confirming that he had no claim on the house (which he signed). Following Mrs Blackwell’s death she suggested he could buy the house for £425,000 which was rejected as an overvaluation. Mr Warner, who originally agreed that he did not want to stay in the property, then said that he would like to as he had been very happy in the property, he had contributed to the running costs, he was close to his neighbours (one of whom was a doctor) and he did not want the upheaval of leaving at a time when he was in his mid-90s.
Mrs Lewis made a claim for possession of the property, which Mr Warner defended. He issued proceedings under the Inheritance Act for reasonable financial provision from the estate. He claimed the right to purchase the property from the estate at market value, as ‘maintenance’. He claimed that he didn’t just want to stay in the property – he needed to do so due to his age, various physical disabilities, the length of time he had been there, the contributions to the property and his supportive neighbours.
At first instance, the Recorder agreed and ordered that he be entitled to purchase the property for £385,000 (the property had been valued at £340,000 by a joint valuer, but Mrs Lewis had then obtained a higher value). Mrs Lewis appealed to the High Court.
Newey J upheld the decision, on the grounds that the term ‘maintenance’ could ‘encompass an arrangement for full consideration, and a person can be in need of it without being short of money, where money cannot secure them what they require.’ That was the case here – Mr Warner could afford to buy a property, but did not want to have to move from his home. Mrs Lewis appealed to the Court of Appeal.
The questions for the Court of Appeal to consider were:
- Was the Recorder’s original conclusion that Mrs Blackwell’s will did not make reasonable financial provision for Mr Warner’s maintenance correct?
- Was the Recorder entitled to make the order that he did, under the 1975 Act?
In respect of the first question, s1(2)(b) of the Inheritance Act provides that reasonable financial provision (for any applicant other than a spouse or civil partner) means “such financial provision as it would be reasonable in all the circumstances of the case for the applicant to receive for his maintenance”. Sir Geoffrey Vos, giving the leading judgment, noted that the concept of maintenance is broad, but that it cannot extend to anything which might be desirable for the Claimant to have. Instead, it “must import provision to meet the everyday expenses of living”. Maintenance is flexible and must be assessed on a case by case basis. It is not limited to subsistence. The purpose of a maintenance award is not to confer capital on the Claimant (and so it may be more appropriate to award a life interest rather than a property outright, if housing is being awarded), but it does not follow that maintenance has to be paid by periodical payments.
There was some discussion of the concept of a moral claim, and whether that is required in order to make a successful claim under the Inheritance Act. Sir Geoffrey Vos stated that “Need, plus the relevant relationship to qualify the claimant, is not always enough”. Whilst there was no moral claim here, Mr Warner having accepted that he did not have any expectation of being able to stay in the house after Mrs Blackwell’s death, the judges hearing the matter were obviously concerned to assist him if at all possible.
The Recorder had found that Mr Warner was being maintained by Mrs Blackwell, in that the property they lived in was hers and so she was providing a roof over his head. Balancing the needs of Mr Warner against those of Mrs Lewis led to the conclusion that Mr Warner’s needs were to take precedence. Sir Geoffrey Vos agreed, noting as he did that he had taken into account the Supreme Court’s views (as expressed in Ilott) on freedom of testamentary disposition.
As the will of Mrs Blackwell did not make reasonable financial provision, the question was what would do so? Again, the Court of Appeal agreed with the Recorder that he was entitled to find that Mr Warner needed to stay in the house.
In respect of the second question, the Court of Appeal examined whether the transfer of property for full consideration could really be regarded as maintenance or as reasonable financial provision. It is clear under the Inheritance Act that provision can be made by transfer of property. Sir Geoffrey Vos found that it is not necessary for consideration to move from the estate – there are occasional cases, such as this one, where the precise financial value of the property is less important than the fact of the property itself. Whilst an order of this kind is unusual, he was not prepared to rule it out on the grounds of jurisdiction. The Recorder had been entitled to make the decision that he did.
There is no doubt that this is an unusual case. It may, however, be useful for Claimants who have no obvious financial need but do wish other requirements to be taken into account. The Court of Appeal judgment also contained a very helpful discussion of maintenance and the authorities on that point. It confirmed that maintenance is a very broad concept – whether the decision actually broadens the concept any further is a moot point.